Marine Products Corp. reports 2Q results

Marine Products Corp., manufacturer of Chaparral and Robalo boats, today reported a drop in sales and profits for the second quarter, which ended June 30.

For the quarter, Marine Products generated net sales of $29,098,000, an 8.1 percent decrease compared to $31,677,000 last year.

The decrease in net sales was due to a 17.9 percent decrease in the number of boats sold, partially offset by a 12.4 percent increase in the average selling price per boat, the company said. Average selling prices improved among most of the product lines because of the mix of models sold during the quarter, highlighted by the sales of the new 327 SSX Sportboat, which carries selling prices that are significantly higher than the overall average.

Gross profit for the quarter was $4,907,000, or 16.9 percent of net sales, compared to a gross profit of $6,597,000, or 20.8 percent of net sales, in the prior year.

The decline in gross profit in the second quarter of 2011 compared to the prior year was the result of lower unit sales, decreased efficiencies resulting from lower production levels and, to a lesser extent, higher cost of materials

Net income for the quarter ending June 30 was $1,229,000 compared to net income of $2,465,000 in the prior year. Diluted earnings per share for the quarter were 3 cents compared to 7 cents per share in the prior year.

“In response to early second quarter economic events, especially a rise in gasoline prices, Marine Products Corp. decreased production levels compared to both the first quarter of 2011 and the second quarter of 2010,” CEO Richard Hubbell said in a statement.

“We reduced production in order to manage our dealer inventory levels through the end of the retail selling season and in preparation for the new model year,” he added. “We are pleased to report that our domestic dealers actually achieved higher retail sales during the quarter compared to the prior year resulting in field inventories that were lower than at the end of the first quarter of this year. These operational metrics as well as more recent indications of relatively stronger dealer demand have prompted us to begin increasing production to support sales for the 2012 model year.”

Net sales for the six months ending June 30 were $56,246,000, an increase of less than 1 percent, compared to the first six months of 2010. Net income for the six-month period was $1,895,000 or 5 cents earnings per diluted share, compared to net income of $2,385,000, or 7 cents earnings per diluted share in the prior year.

Comments

I looked at the new Chaparrals not long ago and it was quite obvious they decided to go “upper end” and all but exit the entry or more affordable boat. I would imagine all was done to try and capture the more affluent buyer. If true, it looks questionable if this strategy has worked or perhaps it just needs more time. It will be interesting to watch. Chaparral and Robalo are both great brands and quality boats. I hope they succeed.